Bitcoin Fog Mixing Service Founder Arrested

  • The founder of the bitcoin Fog mixing service has been arrested in Los Angeles
  • Roman Sterlingov is accused of a litany of financial crimes for allegedly helping to launder 1.2 million bitcoin
  • Using bitcoin mixing services is not illegal but operating them is

The operator of the Bitcoin Fog bitcoin mixing service has been arrested on three counts related to the alleged laundering of $355 million. Russian-Swedish Roman Sterlingov, 32, started Bitcoin Fog in 2011, with the Department of Justice (DoJ) claiming that the site has helped obfuscate the origins of some 1.2 million bitcoin over ten years. According to the DoJ the bulk of the tumbled bitcoin has links to “illegal narcotics, computer fraud and abuse activities, and identity theft” on the dark web, acting as a “go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement.”

Bitcoin Fog Founder Faces Prison or Hefty Fine

Sterlingov was arrested at Los Angeles International Airport on Tuesday, the same airport where former OneCoin CEO Konstantin Ignatov was arrested in 2019, on charges of money laundering, operating an unlicensed money transmitting business, and money transmission without a license. Sterlingov could face decades in prison for operating Bitcoin Fog, although the case of Larry Dean Harmon could be a precedent — Harmon was hit with a $60 million fine last year for operating Helix and Coin Ninja bitcoin Mixers.

Cryptocurrency Mixers Technically Legal to Use

Bitcoin mixers such as Bitcoin Fog still operate in something of a gray area, with the Department of Justice previously labelling the use of them a “crime”, yet turning a blind eye when the FBI seemingly used them in a 2018 case. The case in question involved ₿39.67 retrieved from a convicted sim swapper, with victims surprised to see that the FBI had possession of the coins eight months earlier than they had initially said.

The coins themselves arrived not from the criminal’s address but from an address that was almost certainly that of a bitcoin mixing service- perhaps even Bitcoin Fog. This meant that victims had to take on faith the FBI’s statement of how much was recovered, something that past events, in particular the Silk Road case, have shown to be troublesome.

Originally published at on April 29, 2021.




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